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The Sports Direct Case Nails the Brexit Myth that Brussels 'Red Tape' Stifles the UK Workplace

09/06/2016 11:12 | Updated 09 June 2016

Mike Ashley is a clever and resourceful businessman. He is able (and I mean this in a truly non pejorative way) to exploit the most flexible and laissez-faire employment laws in Europe to deliver maximum return to Sports Direct's shareholders for minimum investment in the workforce. In early 21st century Britain, there is no such thing as "Brussels Red Tape" stifling UK working practices, or UK competitiveness.

That is the lesson from Mr Ashley's appearance in front of the Commons' Select Committee yesterday. The second lesson is that is possible to engage up to 80% of a large workforce on "zero-hours" contracts where there is no guarantee of work, per day or per week. Large employers can draw on a pool of willing workers where this may be the only means of work in their locality.

Further, the vast majority of the costs imposed on employing Sports Direct workers emanate from the UK, not from Europe. The Minimum Wage, which Sports Direct has failed (at times) to honour. The coming Living Wage. 13.8% National Insurance contributions. Auto-enrolment. All of these are UK laws and levies. We are not required by Europe to have them. These are absolute costs.

Most of the EU-based regulations apply (some might think fairly) only if the employer behaves egregiously: for example, less favourable treatment under equalities law. As such, these are conditional liabilities but they do not apply directly.

Examples abound of a truly flexible labour market in the UK: more agency workers went to work this morning in the UK than in the rest of the 27 states of the EU combined. Ryan Air engages its pilots through third party companies and does not pay holiday pay. Uber engages workers (but not employees) on a truly flexible basis. In virtually all cases, labour is provided on a flexible and professional basis but at the lowest possible on-cost to the employer. Every year, for the remainder of most readers' working lives, there will be a steadily increasing percentage of the UK workforce providing their labour on this basis.

As consumers, we benefit but the workers may not. Note, "may" not: it is highly simplistic to assert that all agency-type workers are exploited - the vast majority (especially women) welcome the flexibility as well as often higher hourly rates of pay. They are often prepared to trade employment security for higher pay (as is the case with many agency nurses working in the NHS, for example). Many workers also take the benefits of paying lower rates of tax.

Every business man and woman worth their salt knows that the reality of early 21st Century Britain is that there is no such thing as Brussels "red tape" stifling UK competitiveness. It is relatively easy to hire and fire in this country and laws such as the Working Time Regulations are mere straws in the wind to the ruthless innovators of the future.

Follow John Hayes on www.constantinelaw.co.uk; LinkedIn and @JohnHayesCLaw

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